Gold fever descended on print media and city hoardings on Akshaya Tritaya last month, as it does during every festive season on the Indian calendar. Newspapers were plastered with advertisements of models or stars from Bollywood or south Indian cinema wearing lavish, glittering ornaments, some of which are expansive enough to replace clothes.
Male celebrities had a place of honour too – Bollywood superstar Akshay Kumar posed with his wife Twinkle Khanna who wore gold jewellery from PC Jewellers, and none other than Amitabh Bachchan himself represented Kalyan Jewellers – offering 25 Mercedes Benz cars with lucky draw coupons on purchases.
In fact, Priyanka Chopra’s glamorous diamond-laden advert for Nirav Modi was almost conspicuous by its absence. But, oh well.
Going by the fanfare that jewellery brands are making this year, it appears that the fangs of demonetization and the labour pangs of GST are a thing of the past. If anything, they appear determined to win back any customers they may have lost.
Of course, there’s nothing like Bollywood to make your presence felt. The connection between film stars and jewellery labels is a symbiotic one – both stand to benefit from such advertisements: the stars get exposure and omniscience (picture a smiling Kareena Kapoor dipped in ornaments by Malabar Gold on a hoarding on a winding hill road between two small towns in Kerala).
And the jewellers benefit by the mental recall with a famous face, endowing themselves with a bit of stardust and a dollop of trustworthiness by association.
The spurt in advertising comes after a tough couple of years for jewellers in India. Following new rules in January 2016 when 1% excise duty was levied on jewellery manufacturing and the PAN card was made a requirement for all gold purchases above Rs 2 lakh, jewellers across India went on strike for over a month in protest, resulting in a steep drop in production and sales. Demonetization the same year dampened prospects of a revival.
All these factors led to a massive 24% fall in the demand for gold jewellery from financial year 2015 to 2016, from 505 tonnes to less than 400 tonnes (source). Net exports of gold jewellery fell from USD 36.2 billion in 2015 to 32.6 billion in 2016.
GST implementation – including the application of 3% GST on gold and precious metals – in mid-2017 further crippled the market, but there was a flash of hope later in the year, as consumer demand inched back up to 454.4 tonnes by September (source) and exports rose to USD 35.6 billion. But the Nirav Modi – Punjab National Bank scam of early 2018 once again hit the industry, as lending institutions tightened loan approvals.
So far, the jewellery industry has been a glam icon in the Indian economy. The gems and jewellery market in India contributes around 7% of the country’s GDP and 15.71% to India’s total merchandise exports, and employs over 4.64 million workers. Its market size is about USD 60 billion as of 2017, and it contributes a whopping 29% to global jewellery consumption.
The sector has over 300,000 players, but only about 18% of these constitute the organized sector, and that too if one counts both national players (such as Tanishq, Reliance Jewels and the now-scandal-hit Gitanjali Jewels) and regional retail chains like Kalyan Jewellers, Malabar Gold, PC Jewellers, TBZ, GRT Jewellers, P N Gadgil, Thangamayil Jewellery, Joyalukkas and a few others.
Considering how many fortunes are linked with this sector, and how easily it is affected by market sentiment and perceptions, any ostentatious display of marketing muscle is actually good news: the glittering necklaces hanging from the necks of beaming film stars splashed across city supplements are a reflection of a recovering consumer demand – and an eager supply.
Kalyan Jewellers is leading the pack at present. Armed with a Rs 1,200 crore investment from the Indian arm of US equity firm Warburg Pincus, the Kerala-based jewellery firm has not only added several stores across India to its retail arsenal, it has also roped in a constellation of film stars for its different regions.
With the southern states accounting for about 37% of gold jewellery retail in India, Kalyan Jewellers signed up with four major stars this season – Prabhu Ganesan, Akkineni Nagarjune, Shivrajkumar and Manju Warrier – to lure these audiences.
“In many ways, the business of jewellery is very nuanced,” says Ramesh Kalyanaraman, executive director – marketing and HR, Kalyan Jewellers. “Patterns, styles, sensibilities and preferences are as diverse as the languages and the dialects that our country has.” Hence, he says, his brand has selected a regional brand ambassador in each of the southern states.
Kalyan Jewellers also has ‘global brand ambassadors’, all from Bollywood – Amitabh Bachchan, Jaya Bachchan and Katrina Kaif – befitting the fact that the western Indian states account for 32% of the Indian gold jewellery market.
“While we are a global brand, we also intend to drive home the point that ours is a hyper-local showroom, and a place that each individual can walk into without feeling alienated,” explains Kalyanaraman. In the past, the brand has worked with the likes of Aishwarya Rai Bachchan and Sonam Kapoor.
While northern states fall far behind the gold-laden south and west of India in gold jewellery retail (18% of the national pie), they do cover up in terms of diamond jewellery. Which is why Khanna Jewellers, a Delhi-based 65-year-old jewellery house, has – over the past six years – invested in tieups with actors such as Jacqueline Fernandez, Chitrangda Singh and Malaika Arora in glamorous ad campaigns shot by Bollywood photographer R Prasad.
“Unlike southern cities, which have their own large customer base, Delhi serves the entire northern region in terms of jewellery retail,” says Vikram Khanna, director, Khanna Jewellers, explaining the need for nationally recognized faces to represent the brand.
He adds, however, that a marketing campaign with a celebrity only adds a certain ambience to the product and is not a guarantee of tangible jump in sales.
Other jewellery brands agree. “A good ad campaign can get a conversation started about a particular product. The presence of a celebrity builds a brand connect and also ensures top-of-the-mind recall. This is one of the many contributing factors for sales, but not the most important or the biggest one,” says Kalyanaraman.
A celebrity not only poses in the brand’s latest collection – which is selected keeping in mind the season’s trends and the time of year – she or he must also talk about the brand on social media, and be seen at events wearing the brand’s jewellery.
While most brands are tight-lipped about the amount of expenditure earmarked for celebrity endorsements due to confidentiality agreements, industry insiders say each campaign could cost anything from Rs 20 lakhs to Rs 1 crore, or more, depending on the celebrity.
To some, the styling involved in gold jewellery shoots appears completely at odds with trends in the fashion industry. With its emphasis on ‘muchness’ and ostentation, many ads – more so in the south – are no-holds-barred when it comes to laying on the gold. A single ad may display as much as a dozen pieces of jewellery, and will be carried across all mass media platforms – print, digital and often as a TV campaign too.
Jewellery designers in the fashion world, however, influenced by global trends in design, are experimental, edgy, minimalistic and often present only one small jewellery item in a shot. These ads are usually reserved for fashion magazines and social-media platforms like Instagram. Designers such as the Kolkata-based Eina Ahluwalia, in fact, use ads to focus on the message behind the product – stop domestic violence, foster inter-community peace, respect yourself – as much as the product itself.
Design-led fine jewellery brands – such as Khanna Jewellers, TBZ and Hazoorilal – usually opt for visuals that denote luxury and sophistication, and, as Khanna says, “select celebrities with a classy image and sense of fashion”.
The aesthetic differences serve their own purpose. While fashion jewellery is trend-based and caters to a more niche urban, globally influenced audience who can afford a new item every season, regional gold and diamond jewellery brands cater to the wedding market and to the aspirations of the average Indian for whom jewellery is still an investment, not an expense.
As one of the largest consumers of jewellery in the world, there’s enough space for all kinds of sensibilities in India. More is more, after all.
First published in The Voice of Fashion